Member Sign In

You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate but affiliated companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.

If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.

Please Login

In August, Posiet Port loaded record 26 cargo ships with a total of 509,000 tonnes of coal products driven by improvements in the port's technical support made within the framework of the large-scale modernization program, scheduled to be completed by the end of 2012.

Posiet Port achieved a new level in transshipment of coal, which is particularly important as the enterprise ensures access for Mechel OAO's products to key Pacific Asian markets.

Posiet Portis is currently undergoing technical re-equipment and expansion of the port's infrastructure, and aims at increasing the port's annual coal transshipment capacity to 9 million tonnes. The total cost will amount to some 73 million dollars.

As part of the restructuring, the port's drainage runs, crane runways and railway tracks had already been lengthened, which enabled the company to admit simultaneously three ships to loading berths. The port commissioned additional equipment, including two hydraulic grab loaders produced by Terex Fuchs and Liebherr Group of Germany, a portal loader produced by Finnish-based Mantsinen Group, and a mobile stacker produced by British-based Telestack.

In June 2011, the company reported its results for first-quarter 2011. The company recorded a net income of $309.1 million in the quarter, comprehensively beating last year’s consolidated net income of $82.6 million, a jump of 274.3% year over year.

Revenues in the first quarter 2011 soared 54.4% year over year to $2.9 billion based on the company’s relentless efforts to increase production.

Throughout the quarter, the company made concerted efforts to enhance the coal production volumes by modernizing production facilities, perfecting the marketing structure, developing new high value-added products and lastly, by implementing strategic investment projects, which strengthened its market position.

Operating profits in the reported quarter climbed more than three times the first quarter profit in 2010 and amounted to $448.4 million compared with the operating income of $147.6 million in the first quarter of 2010. Operating margin was 15.28% in the first quarter of 2011 versus 7.77% in the first quarter of 2010.

Mechel is a leading domestic steel and coal producer with a strong position in key businesses, including production of specialty steel and alloys. The company has the largest coal reserve base in Russia. It is focusing on growth and cost-cutting measures.

Mechel has also entered into various agreements to supply its rail products to large Russian metal mining companies. We are positive on the company’s favorable business profile with a high degree of backward integration and low-cost structure. Mechel’s key assets are located close to the major steel consuming markets.

In addition, the company owns and controls essential infrastructure, including ports, rolling stock and power plants, which provide access to export markets. However, Mechel’s large capital-spending program, high debt and substantial interest burden are matters of concern.

Top Zacks Features

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Zacks.com. Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

Zacks Research is Reported On:

At the center of everything we do is a strong commitment to independent research and sharing its profitable discoveries with investors. This dedication to giving investors a trading advantage led to the creation of our proven Zacks Rank stock-rating system. Since 1986 it has nearly tripled the S&P 500 with an average gain of +26% per year. These returns cover a period from 1986-2011 and were examined and attested by Baker Tilly, an independent accounting firm.

Visit performance for information about the performance numbers displayed above.